Pandemic punches holes in city revenue

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This article was published 12/09/2021 (1103 days ago), so information in it may no longer be current.

The City of Winnipeg’s finances continue to be battered by the pandemic.

The city is forecasting deficits of $14.3 million for its general revenue account and another $12.4 million for Winnipeg Transit, as of June 30. Winnipeg had already included a total of $61.2-million COVID-19 impacts in its 2021 budget.

“It’s not surprising that COVID-19 has had a deeper impact on the city’s finances than we anticipated,” said Coun. Scott Gillingham, chairman of the finance committee.

Buses are much emptier than pre-pandemic — ridership has dropped about 57 per cent. Passenger revenues are predicted to be down $17.6 million. Cost savings, in salaries and benefits, have helped alleviate some of Transit’s financial stress, according to a city report.

Cash from parked cars and city-owned recreational facilities has also decreased, Gillingham said.

“Many people are still not back to work downtown,” he said Monday, adding many university students are solely taking courses online instead of commuting.

Normally, second-quarter deficits are eliminated or decreased by the end of the year, according to a city report. But a rebound is uncertain right now due to the spread of the delta variant of the novel coronavirus, Gillingham said.

This year’s general revenue fund deficit is 74 per cent higher than the largest deficit projected in June for the previous five years.

“(We’re) really trying to scrutinize all expenses,” Gillingham said.

Senior management now reviews requests for hiring before city positions are added. Employees have accepted voluntary furloughs; there’s been a drop in services in the Winnipeg Parking Authority.

City bureaucrats recommend reserve funds be transferred to Winnipeg’s general revenue account if the finances are still red in December.

Gillingham said there’s no intention to hike taxes above the multi-year budget plan, which includes a property tax increase of 2.33 per cent annually. Mayor Brian Bowman said the same last week.

“There are several residents in Winnipeg whose incomes have been affected negatively by COVID-19,” Gillingham said. “I’d be concerned about asking people to pay more taxes.”

The city is creating an economic recovery plan. It will take years for the books to be normal, Gillingham said. “It’s not like a light switch — you (can’t) just flick it on.”

The Downtown Winnipeg Business Improvement Zone has been working with the city on its post-pandemic plan. The organization is also prepping a recovery strategy, according to chief executive officer Kate Fenske.

“Our hope is, as more workers do come back this fall, that we can create events and different activations that can make their return to work back downtown more enjoyable,” she said.

The strategy should be made public in late fall. Meantime, Manitobans are filtering into Winnipeg’s core — albeit more slowly than expected, Fenske said.

“There’s a lot of work that we’re going to need to do as a community moving forward in the next… three years.”

gabrielle.piche@freepress.mb.ca

Update on COVID-19 financial implications